Many of the community-focused sites the project examined in the U.K and the U.S. still rely on traditional advertising methods for revenue, the project found. The three local U.S. websites studied sell weekly or monthly banner ads, with DavidsonNews.net in North Carolina making 75 percent of its revenue with banner advertising and classifieds. "It was almost a disappointment for our research team to find out how strong the old model of display advertising was among many of the websites we studied," the authors write. But, they add, "although ad dependency remains strong, some of the sites had found alternative and sometimes innovative ways to monetize their journalism."

Produce journalism, sell technology

Among those innovative money-making tactics is the development of technological tools, the report states. For example, U.K.-based Blottr allows citizens to post multimedia accounts of local news events, and Tweetminster uses data to organize what U.K. higher-ups think is newsworthy. Both have made money selling their technology.

"We took the view that we’ve got some great technology that powers Blottr,” Blottr founder Adam Baker told the authors. “So we’ve engineered that to be able to license it as a white label to other publishers, to enable their users to be contributors as well as consumers.”

Creating new types of news

Startups increasingly find and create new types of news to offer consumers. The Italian-founded company China Files operates out of Beijing and provides China-based news to various Italian and Spanish media outlets, the authors report.

Some new companies have found success marketing themselves as industry firsts. Irish outlet Storyful, for example, calls itself the “first news agency of the social media age." The U.K.-based Demotix is described by management as “the citizen journalism AP," selling its content to publications like The Guardian and The Wall Street Journal, the authors say. “Our understanding is that AP doesn’t have a staff reporter in 40 percent of the world’s countries, whereas Demotix is in almost every country," CEO Turi Munthe told Nieman Lab.